IR35 Client Solutions
IR35 is the more familiar term for the Intermediaries Legislation. It is tax legislation brought in by the HMRC to tackle disguised employment and is the default “test” for self-employment (for tax purposes only) when a contractor is working through their Personal Services Company (PSC). The legislation is designed to distinguish between a genuine self-employed contractor working via their PSC (“outside of IR35”), and those who work via their PSC but whose working practices would suggest they are operating more like an employee (“inside of IR35”).
Up until the 5th of April 2021, the responsibility and liability for determining a Private Sector contractor’s status as ‘inside’ or ‘outside’ of IR35 rests with the contractor themselves. However, from the 6th of April 2021, this responsibility and liability shifts to the End Client, who will have to prove that they have a robust process to determine this, and have taken ‘reasonable care’ to ensure that their determination is sound.
urban has been consulting on IR35 with our clients since it was first introduced into the public sector in 2017. We then leveraged this knowledge to support multi-sector private sector clients leading up to the delayed implementation in March 2020. Our team has experience of supporting clients with a few contractors, right up to a large private company with a contractor workforce of 1,500.
Recognising that each of our clients faces different challenges, and has a different level of resource that they can allocate to IR35, urban has developed a range of solutions that address the various stages of an IR35 implementation project.